HHS/HRSA issue 'interpretive rule' on 340B orphan drug discounts

AHA News NowJul 21, 2014

The Department of Health and Human Services and its Health Resources and Services Administration today issued an interpretive rule that continues to allow hospitals subject to the orphan drug exclusion to purchase “orphan drugs” through the 340B Drug Pricing Program when the drugs are not used to treat the rare conditions for which the orphan drug designation was given. The agencies said the interpretive rule intends to provide clarity in the marketplace; maintain the 340B Program savings for newly-eligible entities; and protect the financial incentives for manufacturing orphan drugs designated for a rare disease or condition, as indicated in the Affordable Care Act. “The AHA supports HHS and HRSA’s interpretive rule and believes it reflects the intent of Congress to improve access to 340B discounted drugs for rural and cancer hospitals and the patients and communities they serve,” said Jeffrey Goldman, AHA vice president for coverage policy. In May, a federal court ruled in favor of the Pharmaceutical Research and Manufacturers of America and vacated HHS’s adoption of a regulation to implement the orphan drug exclusion policy; however, it did not invalidate HRSA’s interpretation of the statute or preclude HRSA from issuing guidance in the form of an interpretive rule to implement its interpretation. PhRMA continues to challenge HRSA’s interpretation in the courts. The orphan drug exclusion policy applies to critical access hospitals, sole community providers, rural referral centers and free-standing cancer hospitals.